Reference no: EM132854921

Questions-

Q1. On 1 July 20X0 Alpha Ltd received emission trading allowances (ETAs) for 1,000 tonnes of carbon dioxide from the government at no cost. The ETAs can be used over four years, thus expiring at 30 June 20X4. The fair value of ETAs was $32 per tonne at 1 July 20X0 but had increased to $40 per tonne at 30 June 20X1. If Alpha Ltd uses the IFRIC 3 model with revaluation to account for the ETAs, the carrying amount of the Unearned income liability at 30 June 20X1 will be:

a. $8000

b. Nil

c. $30000

d. $24000

Q2. On 1 July 20X0 Alpha Ltd received emission trading allowances (ETAs) for 1,000 tonnes of carbon dioxide from the government at no cost. The fair value of ETAs was $32 per tonne at 1 July 20X0 but had increased to $40 per tonne at 30 June 20X1. Alpha Ltd emitted 500 tonnes of carbon dioxide during the year. Emission obligations are settled on 31 August for the previous year ended 30 June. If Alpha Ltd uses the IFRIC 3 model with revaluation to account for the ETAs, it would recognise:

a. A gain on $4000 on revaluation in other comprehensive income

b. A gain on revaluation of $8000 in other comprehensive income

c. A gain of $8000 on revaluation in profit or loss

d. A gain of $4000 on revaluation in profit or loss

Q3. On 1 July 20X0 Alpha Ltd received emission trading allowances (ETAs) for 1,000 tonnes of carbon dioxide from the government at no cost. The fair value of ETAs was $32 per tonne at 1 July 20X0 but had increased to $40 per tonne at 30 June 20X1. Alpha Ltd emitted 500 tonnes of carbon dioxide during the year. Emission obligations are settled on 31 August for the previous year ended 30 June. If Alpha Ltd uses the IFRIC 3 model with revaluation to account for the ETAs, the carrying amount of the ETA asset at 30 June 20X1 will be:

a. Nil

b. $32000

c. $20000

d. $40000